We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Nuveen ESG SmallCap ETF (NUSC) a Strong ETF Right Now?
Read MoreHide Full Article
Launched on 12/13/2016, the Nuveen ESG SmallCap ETF (NUSC - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Small Cap Growth category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
NUSC is managed by Nuveen, and this fund has amassed over $951.60 million, which makes it one of the larger ETFs in the Style Box - Small Cap Growth. This particular fund, before fees and expenses, seeks to match the performance of the TIAA ESG Small-Cap Index.
The TIAA ESG USA Small-Cap Index comprises of equity securities issued by small-capitalization companies listed on US exchanges.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.30% for NUSC, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
For NUSC, it has heaviest allocation in the Industrials sector --about 17.60% of the portfolio --while Financials and Information Technology round out the top three.
Looking at individual holdings, Willscot Mobile Mini Holding accounts for about 1.06% of total assets, followed by First Solar Inc (FSLR - Free Report) and First Horizon Corporation (FHN - Free Report) .
Its top 10 holdings account for approximately 7.87% of NUSC's total assets under management.
Performance and Risk
The ETF has lost about -13.82% and is down about -14.21% so far this year and in the past one year (as of 11/25/2022), respectively. NUSC has traded between $31.50 and $45.18 during this last 52-week period.
NUSC has a beta of 1.12 and standard deviation of 30.29% for the trailing three-year period. With about 564 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG SmallCap ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
IShares ESG Aware MSCI EAFE ETF (ESGD - Free Report) tracks MSCI EAFE ESG Focus Index and the iShares ESG Aware MSCI USA ETF (ESGU - Free Report) tracks MSCI USA ESG Focus Index. IShares ESG Aware MSCI EAFE ETF has $6.83 billion in assets, iShares ESG Aware MSCI USA ETF has $20.62 billion. ESGD has an expense ratio of 0.20% and ESGU charges 0.15%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Small Cap Growth.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is Nuveen ESG SmallCap ETF (NUSC) a Strong ETF Right Now?
Launched on 12/13/2016, the Nuveen ESG SmallCap ETF (NUSC - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Small Cap Growth category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
NUSC is managed by Nuveen, and this fund has amassed over $951.60 million, which makes it one of the larger ETFs in the Style Box - Small Cap Growth. This particular fund, before fees and expenses, seeks to match the performance of the TIAA ESG Small-Cap Index.
The TIAA ESG USA Small-Cap Index comprises of equity securities issued by small-capitalization companies listed on US exchanges.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.30% for NUSC, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
For NUSC, it has heaviest allocation in the Industrials sector --about 17.60% of the portfolio --while Financials and Information Technology round out the top three.
Looking at individual holdings, Willscot Mobile Mini Holding accounts for about 1.06% of total assets, followed by First Solar Inc (FSLR - Free Report) and First Horizon Corporation (FHN - Free Report) .
Its top 10 holdings account for approximately 7.87% of NUSC's total assets under management.
Performance and Risk
The ETF has lost about -13.82% and is down about -14.21% so far this year and in the past one year (as of 11/25/2022), respectively. NUSC has traded between $31.50 and $45.18 during this last 52-week period.
NUSC has a beta of 1.12 and standard deviation of 30.29% for the trailing three-year period. With about 564 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG SmallCap ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
IShares ESG Aware MSCI EAFE ETF (ESGD - Free Report) tracks MSCI EAFE ESG Focus Index and the iShares ESG Aware MSCI USA ETF (ESGU - Free Report) tracks MSCI USA ESG Focus Index. IShares ESG Aware MSCI EAFE ETF has $6.83 billion in assets, iShares ESG Aware MSCI USA ETF has $20.62 billion. ESGD has an expense ratio of 0.20% and ESGU charges 0.15%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Small Cap Growth.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.